Written Commentary
MORNING AG OUTLOOK
Lower trade across most of the Ag space overnight driven by a collapse to 2 month lows in energy prices. Yesterday Pres. Trump stated that a peace deal with Iran was “now complete” which will reopen the Straits of Hormuz. Pakistan PM Shehbaz Sharif said an official sighing ceremony would take place in Switzerland on Friday. Spot WTI crude oil is down $4.25 a barrel near $80.60. Spot RBOB is down $.10 per gallon while HO is $.09 lower. Friday’s CFTC data showed a record amount of selling by speculators across the Ag. space reducing their net long position to their smallest level in 4 months. Weekend rains favored the SE plains and southern Midwest with temperatures holding at below normal levels for much of the nations midsection. Heavy rains are forecast for the Gulf coast region this week with healthy rains also expected for the central and ECB. Little to no moistures for the WCB. Weekend rains across central Brazil will benefit late 2nd corn however slow early harvest progress. Dry for much of Mato Grosso and far S. Brazil. Dry conditions in Argentina have been favorable for corn harvest. Western Europe remains in a hot/dry pattern. The US $$ is moderately lower while US stock indices have surged 1%-2%.
Corn:
July-26 and Dec-26 are down $.04 ½ at $4.08 ¼ and $4.36 respectively, with both establishing new contract lows. Support for July-26 is near $4.05, a gap on the weekly chart from last Sept-26. Money managers were net sellers of just over 120k contracts in the most recent CFTC reporting period flipping their net position to net short 5k contracts. Consultant Patria Agronegocios reports Brazil’s 2nd crop harvest has reached 6%.
Soybeans:
July-26 beans are $.06 lower at $11.07 ½ while Nov-26 beans are down $.05 at $11.27. July-26 meal is up $1.30 at $302.60 while July-26 oil is down 121 point at 73.09. July beans and meal both traded to a 4-month low while Nov. beans slipped to a 3-month low. Inside trade for July oil. Crush margins slipped $.06 to $3.60 ½ bu. with bean oil PV falling to 54.6%. Money managers combined to sell nearly 165k contracts across the soybean complex, the most ever in a week, reducing their long position to 275k contracts. NOPA members are expected to have processed 216 mil bu of soybeans in May-26, which if realized would be up 2% from April and 12% above May-25. Estimates range from 207 – 223 mil. Bean oil stocks are expected to have fallen to 1.855 bil lbs. down from 1.95 at the end of April.
Wheat:
Prices range from $.08 – $.10 lower across the 3 classes. CGO July-26 is down $.09 at $5.75 ½, KC July-26 is also $.09 lower at $6.25 ½ while MIAX July-26 is off $.08 ¼ at $6.10. Both CGO and MIAX July-26 futures traded to a 4-month low. Money managers were net sellers of 48k contracts across the 3 classes extending their net short position to 74k contracts.
Interested in more futures markets? Explore our Market Dashboards here.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
